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Completed investigation
The FRC found that the auditor, the engagement partner and the engagement quality control reviewer failed or neglected to observe, maintain or otherwise apply certain professional standards in the relevant audit in relation to a business combination in respect of (a) the classification and measurement of contingent consideration; (b) the acquisition-date fair value measurement of the intangible assets acquired; and (c) the expected useful lives and the subsequent measurement of the intangible assets. ... (b) the engagement quality control reviewer failed to comply with the relevant provisions of HKSA 220 (Clarified) Quality Control for an Audit of Financial Statements in relation to the quality control review . (c) the engagement partner and the engagement quality control reviewer failed to fully comply with section 130.1 of the Code of Ethics for Professional Accountants during the audit of the 2014 Financial Statements.
Completed investigation
The FRC found that the auditor, the engagement partner and the engagement quality control reviewer failed or neglected to observe, maintain or otherwise apply certain professional standards in the relevant audit in relation to (a) the Group’s investment in an available-for-sale investment; (b) the issuance of convertible notes for future management services; (c) impairment assessment of the Company’s interests in subsidiaries; and (d) revenue recognition. The investigation revealed that the auditor and the engagement partner failed to plan and/or perform the relevant audit, in relation to the above matters, in accordance with the relevant provisions of HKSA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in accordance with Hong Kong Standards on Auditings; HKSA 300 Planning an Audit of Financial Statements; HKSA 330 The Auditor’s Responses to Assessed Risks; HKSA 500 Audit Evidence; HKSA 510 Initial Audit Engagements – Opening Balances; HKSA 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures; HKSA 620 Using the Work of an Auditor’s Expert; HKSA 700 Forming an Opinion and Reporting on Financial Statements . It was also found that the engagement quality control reviewer of the relevant audit failed to comply with the relevant provisions of HKSA 220 Quality Control for an Audit of Financial Statements in relation to the quality control review.
Completed investigation
The FRC found that the auditor, the engagement partner and the engagement quality control reviewer failed or neglected to observe, maintain or otherwise apply certain professional standards in the relevant audit in relation to a convertible note that contained contingent settlement provisions. The investigation revealed that the auditor and the engagement partner failed to perform the relevant audit, in relation to the convertible note, in accordance with the relevant provisions of Hong Kong Standard on Auditing (HKSA) 200 (Clarified) Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing and HKSA 500 (Clarified) Audit Evidence . It was also found that the engagement quality control reviewer of the relevant audit failed to fully comply with the relevant provisions of HKSA 220 (Clarified) Quality Control for an Audit of Financial Statements .
Completed investigation
The FRC found that the auditor, the engagement partner and the engagement quality control reviewer failed or neglected to observe, maintain or otherwise apply certain professional standards in the relevant audit in relation to the impairment assessment of the listed entity’s interest in an associate. The investigation revealed that the auditor and the engagement partner failed to properly perform the relevant audit in relation to the estimation of the recoverable amount of the interest in an associate in accordance with the relevant provisions of Hong Kong Standard on Auditing (HKSA) 200 (Clarified) Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing , HKSA 500 (Clarified) Audit Evidence , and HKSA 540 (Clarified) Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures . It was also found that the engagement quality control reviewer of the relevant audit failed to properly perform the quality control review in accordance with the relevant provisions of HKSA 220 (Clarified) Quality Control for an Audit of Financial Statements .
Completed investigation
The FRC found that the auditor, the engagement partner and the engagement quality control reviewer failed or neglected to observe, maintain or otherwise apply certain professional standards in the relevant audit in relation to a business combination and the accounting for the acquired hotel property. The investigation revealed that the auditor and the engagement partner failed to plan and perform the relevant audit, in relation to the above matters, in accordance with the relevant provisions of HKSA 200 (Clarified) Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Hong Kong Standards on Auditing ; HKSA 220 (Clarified) Quality Control for an Audit of Financial Statements ; HKSA 300 (Clarified) Planning an Audit of Financial Statement s; HKSA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment ; HKSA 330 (Clarified) The Auditor’s Responses to Assessed Risks ; HKSA 500 (Clarified) Audit Evidence ; and HKSA 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures . ... It was also found that the engagement quality control reviewer of the relevant audit failed to comply with the relevant provisions of HKSA 220 in relation to the quality control review .
AFRC imposes HK$300 million fine and six-month practice limitation on PricewaterhouseCoopers and HK$10 million in fines on its two former registered responsible persons over the Evergrande Audits
As the group signing auditor, PwC bore ultimate responsibility for audit quality and was required to exercise effective governance and monitoring controls over audit work performed by the Relevant Office. ... This reflects an improper prioritisation of commercial interests over audit quality at that office. ... PwC’s failures to identify and address these and other quality control deficiencies in the Relevant Office materially impaired its ability to ensure audit quality in the Evergrande Group Audits.
Completed investigation
Completed investigation 26 September 2019 On 20 September 2019, the FRC adopted the investigation report on the audit of the consolidated financial statements of a listed entity for the year ended 31 March 2014. ... In particular, it was found that the auditor and the engagement partner were in breach of Hong Kong Standard on Auditing ( HKSA ) 500 (Clarified) Audit Evidence and HKSA 540 (Clarified) Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures . It was also found that the engagement quality control reviewer of the relevant audit failed to comply with the relevant provisions of HKSA 220 (Clarified) Quality Control for an Audit of Financial Statements in relation to the quality control review .
FRC issues Guidelines for Effective Audit Committee and Report on Assessment of the HKICPA’s Performance of the Specified Functions
Highlights of the Guidelines The Guidelines highlight two key factors that audit committees should consider in selecting and appointing auditors – audit quality and audit fees. Audit quality should be the key determinant when reappointing an incumbent auditor or selecting an auditor. ... The Guidelines emphasise the importance that audit fees are not at a level that would compromise audit quality.